


/V\ Strides 



flOeuJ OWe^^-^s^M.^.) 






fldeo^ 0/-(«*^'^s M.^.) 



HB 231 
.N4 
^opy 1 



THE 



NEW ORLEANS COTTON EIGHMGE 



IN THE MATTER OF THE 



GENERAL DECLINE IN PRICES. 



:B 18 1 



^ 





3 



504 



The accompanying extracts from the pi'oceedings of the 
International Monetary Conference held at Brussels, in Novem- 
ber, 1S93, and from the tables of the Finance Committee of the 
United States Senate, and also from those of Mr. Augustus 
Sauerbeck, and of the late Dr. Adolph Soetbeer, are sub- 
mitted to prove that of recent years there has been a marked 
decline in very many articles of great importance, and that the 
decline in the price of cotton is no greater than is the average 
decline of these other commodities, none of which are practi- 
cally handled in the so-called future markets. 

A notable exception is in the case of coffee, which, according 
to the tables of Mr. Augustus Sauerbeck, shows that as between 
i860 and 1S91 an important advance has taken place in this 
article. 

When it is borne in mind that no article is more extensively 
dealt in through the system of futures, both in the United States 
and Europe, than is coffee, it would seem clear that the conten- 
tion that future selling depresses prices abnormally has no 
ground to stand on. 

If, therefore, future selling, pure and simple, has put down 
the price of cotton, why has it not had the same effect on the 
price of coffee, when, as said above, coffee is an article that is 
enormously dealt in through the future markets of the United 
States and Europe ? 

The statistical information submitted is taken from the 
report by Senator Aldrich, from the Committee" on Finance, 
March 3, 1893, Senate Document 1394, part i. Fifty-second 
Congress, second session. 

J. W. LABOUISSE, 
President New Orleans Cotton Exchang-e. 



I submit for the consideration of the committee a table 
showing the decline in the wholesale price of many com- 
modities of daily use as between the period of i860 and 
1891. 

The figures given in this table are taken from a report 
made by the Committee on Finance of the United States 
Senate in the second session of the Fifty-second Con- 
gress. The report is known as report No. 1394. The 
comparisons are made with the prices of i860, that year 
having been one that was free from tiie disturbing influ- 
ences brought about by the war and from the fluctuations 
in prices after the war that were caused by the constant 
change in the value of the greenback dollar as compared 
with the gold dollar until the resumption of specie pay- 
ment in 1879. It will require but a rapid glance at the 
figures given to show that the decline in these various 
commodities has been on an average much greater than 
in the case of cotton; and when it is borne in mind that 
the great bulk of these articles are not dealt in in the way 
of future selling, as is the case with cotton, it seems ob- 
vious that the contention that the decline in the price of 
cotton since i860 is due to future selling has no reason- 
able ground to stand on. 



Articles. 



Cheese 

Raisins 

Corn starch 

Oyster crackers 
Currants, dried 

Bacon 

Brown sugar 

Mess pork 

Flour 

Molasses 



Prices. 


i860. 


1891. 


100 


95.00 


100 


91.30 


100 


82.40 


100 


80.00 


100 


79.20 


100 


76.00 


100 


75.00 


100 


75-00 


100 


72.10 


100 


67.90 



Percentage 
of decline. 



5.00 per cent. 

8.70 " 

17.60 " 

20.00 " 

20.80 " 

24.0Q '^ 

25.00 " 

25.00 '* 

27.90 '' 

32.10 " 



Articles. 



Cut sugar 

Salt Beef, mess 

Coarse salt 

Fine boiled salt 

Tallow, prime, city, in hogsheads 

Brussels carpets 

Sole leather 

Leather, harness 

Cotton, upland, middling 

Brown sheetings, 4-4, Atlantic 

Blankets, 11-4, 5 pounds to pair, cotton warp, 

all wool filling 

Checks, black and white, all wool, 3-4, 70Z., 

Harris 

Wool, Ohio, medium fleeced, scoured 

Horse blankets, 6 pound, all wool 

Denims, Amoskeag 

Drillings, 30-inch, Pepperell 

Carpets, ingrain, 2-ply, Lowell 

Blankets, 11-4, 5 pounds to the pair, cotton 

warp, cotton and wool filling 

Sheetings, bleached, 4-4, N. Y. Mills 

Tickings, Amoskeag, A. C. A 

Wool, Ohio, fine fleece, scoured 

Calico, Cocheco prints 

Dry hides, Buenos Ayres 

Print cloths, 28-in., 64 by 64, Metacomet 

Print cloths, standard, 28-in., 7 yards to 

pound 

Matches, S-card 

Coal, bituminous 

Candles, best adamantine 

Lead drop shot 

Pig iron, No. i, Anthracite Foundry 

Copper, sheet 

Shovels, Ames' No. 2, cast steel 

Pig lead 

Bar iron, best refined, rolled 

Saws, crosscut, 6-t"oot, Disston's 

Locks, common mortise 

Scythes 

Copper, ingot 

Nails, cut 

Iron wire, market. No. 10 

Locks, common rim 

Saws, circular, 52-inch, Disston's 

Meat cutters, Hale's No. 12 

Door knobs, mineral 

Saws, hand, common, Disston's 

Plate glass, polished, unsilvered, i 3 sq. feet- 
Carbonate of lead in oil 

Cement, Rosendale 

Window glass, American, ID by 14, firsts, single 




82.90 

82.30 
81.70 
81.10 
Si. 00 
76.80 
78.40 



Percentage, 
of decline. 



37.80 per cent. 



17.10 

17.70 
18.30 
1S.90 
19.00 
23.20 
21.60 

23-30 
28.30 
29.40 
31 00 
36.80 
44.80 
45-30 



23.00 
25.40 
27.30 
29.90 
27.60 
34.80 

39-90 
40.00 
40.40 
40.60 
42.30 
45.60 
4720 
57-70 
60.00 
62.50 
12.20 
13.80 
i5'oo 
16 90 



Articles. 



Tar, Wilmington 

Pine doors, unmoulded, etc 

"Window glass, French, lo by 14, firsts, single 
Plate glass, polished, unsilvered, 40-80 sq. 

feet 

Putty 

Plate glass, polished, unsilvered, 80-100 sq. 

feet 

Sugar of lead, Brown 

Alum, lump, crystal 

Copperas 

Flaxseed 

Soda ash 

Brimstone, crude 

Bichromate of potash , 

Blue vitriol 

Opium 

Glycerine, refined 

Muriatic acid 

Quinine 

Sulphuric acid 

Wooden tubs 

Furniture, chairs, bedroom, maple, cane seat 
Glassware, tumblers, >5,-pint 

" sets, finished 

" bowls, 8-inch 

" pitchers, ^-gallon 

" goblets, common 

Soap, castile, mottled, imported 

Starch, ordinary laundry 



Prices. 



i860. 1 1891. 



100 
100 
100 

100 
100 

100 
100 

ICO 

100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 

ICO 

100 
100 
100 
100 
100 
100 
100 
100 



80.00 

78.10 
78.00 

66.70 
66.70 

57.20 
80.00 
77.80 
75.00 
69.30 
68.40 
57.80 
47.60 
47.40 
39.10 
38.80 
29.20 
27.30 
27.30 
82.20 
70.00 
41.70 
36.60 
30.00 
20.60 
15.60 
73-50 
63.20 



Percentage 
of decline. 



20.00 per cent. 
2 1 .90 



33-30 
33-30 

42.80 
20.00 
22.20 
25.00 
30.70 
31.60 
42.20 
52.40 
52.60 
60.90 
61.20 
70.80 
72.70 
72.70 
17.S0 
30.00 
5S.30 
63.40 
70.00 
79.40 
84.40 
26.50 
36.80 



The following figures are from the tables of the late 
Dr. Adolf Soetbeer, which were submitted to the Royal 
Commission that had under consideration the divergence 
in the price of gold and silver. They represent prices 
current in the market of Hamburg. To show in what 
high esteem the figures of Dr. Soetbeer were held by the 
Royal Commission, I quote from their final report, as 
follows, viz. : 

" But before entering upon the statistics relating to the 
" production and consumption of the precious metals, 
" we desire to express our acknowledgment to the recent 
*' work of Dr. Soetbeer, which contains so much valu- 
*' able information on this and many other points con- 



*' nected with monetary questions. Throughout our 
" report we shall frequently refer on all statistical ques- 
*' lions to the figures compiled by Dr. Soetbeer. He ex- 
*' plains very fully in all cases the sources of his infor- 
" mation and the methods he has adopted in compiling it; 
" and we have not met with any other figures which ap- 
*' pear more deserving of general acceptance." 

In the subjoined table the average of the prices current 
in Hamburg for the period 1847-50, for the various 
articles named, is taken as a basis, and calling that basis 
100, the prices current in 1891 in Hamburg, as shown in 
the table, indicate the relative prices as compared with 
those of the period 1847-50, and the percentage of 
decline: 



Articles. 



Carpets 

Wheat 

Wheat flour .... 

Linseed oil 

Raw sugar 

Refined sugar 

Tallow 

Lard 

Calf skins 

Fish oil 

Currants 

Olive oil 

Tea 

Pimento 

Cassia 

Rice 

Sago 

Cochineal 

Redwood 

Mahogany 

Palm oil 

Pig iron 

Bar iron 

Steel 

Copper 

Quicksilver .... 
Sulphur, raw .. 

Saltpetre 

Salt 



Prices. 


Percentage 






of 
Decline. 


1849-50, 


189 1. 


100 


76.62 


2338 


100 


96.97 


3-03 


100 


83.68 


16.32 


ICO 


82.91 


17.09 


100 


62.44 


37-56 


100 


^^" 


3289 


100 


68.0^ 


31-95 


100 


71.36 


28.64 


100 


86.73 


13-27 


100 


70.22 


29.78 


100 


83-31 


16.69 


100 


96.66 


3-34 


100 


74-31 


25.69 


100 


58.40 


41.80 


100 


22.81 


77.19 


100 


54-04 


45-96 


100 


5309 


46.91 


ICX3 


22.24 


77.76 


100 


54-15 


45-85 


100 


87-35 


12.65 


100 


73.62 


26.38 


100 


75-27 


24-73 


100 


84.70 


15-30 


ICO 


71.22 


28.78 


100 


67.23 


32-77 


100 


57-79 


42.21 


100 


89.01 


10.99 


100 


65-03 


34-97 


100 


3489 


65 . 1 1 



Articles. 



Lime 

Cement 

Cotton 

Wool 

Flax 

Hemp 

Silk 

Rags 

Guano 

Potash 

Pitch 

Soda 

Tallow candles 

Wax 

Cotton yarn 

Piece goods, plain 

Piece goods, printed 

Glass, common bottles 

Linen, plain 

Woolen and worsted yarn 
Flannel 



Prices. 


Percentage 






of 


1849-50. 


1891. 


Decline. 


100 


69-75 


30.25 


100 


87.66 


12.34 


100 


87.32 


12.68 


100 


47-38 


52.62 


100 


78.6s 


21-35 


100 


79-52 


20.48 


100 


59.28 


40.72 


100 


87.88 


12.12 


100 


46.89 


53-" 


100 


56.36 


4364 


100 


98.53 


1.47 


100 


51-99 


48.01 


100 


41-63 


58.37 


100 


5026 


49-74 


ICO 


93-48 


6.52 


100 


74-52 


25.48 


100 


65.90 


34.10 


100 


80.95 


19.05 


100 


77-43 


22.57 


100 


96.88 


3.13 


100 


83.24 


16.76 



I also submit table of Augustus Sauerbeck. 

Relative prices of commodities in England as between 
i860 and 1891. The prices of i860 are all placed at 100, 
and the figures for 1891 indicate the rise or fall as com- 
pared with i860: 



Articles. 



Wheat, English Gazette 

Wheat, American 

Flour, town made, white 

Barley, English Gazette 

Oats, English Gazette 

Maize, American mixed 

Potatoes, good English 

Rice, Rangoon, cargoes to arrive 

Beef, prime 

Beef, middling 

Mutton, prime 

Mutton, middling 

Pork, large and small, average.... 



Prices. 



i860. 



100 
100 
100 
100 
100 
100 
100 
100 
100 
100 

ICO 
ICO 

100 



I89I. 



69-5 

75-1 
68.7 
77.0 
81.9 
80.0 
83.6 
77-2 
94.0 
95-2 
94-6 
84.0 
72.2 



Percentage of 



Decline. Advance 



30.5 
24.9 

31-3 
23.0 
18.1 
20.0 
16.4 
22.8 
6.0 
4.8 

5-4 
16.0 

27.8 



Articles. 



Bacon, Waterford 

Butter, Friesland, fine to finest.. 

Sugar, British, West Indian, re- 
fining and German or French 
beet, average of price 

Sugar, Java, floating cargoes 

Coffee, Ceylon, plantation low 
middling 

Coffee, Rio, good channel 

Coffee, average of 19 and 20 

Tea, Congon, common 

Tea, average import price 

Tea, average of 21 and 22 

Iron, Scotch pig 

Iron, bars, common 

Copper, Chile, bars 

Tin, Straits 

Lead, English pig 

Coal, Wallsend, Hetton, in 
London 

Cotton, middling, upland 

Cotton, Fair Dhollorah (Surat) 

Flax, average of St. Petersburg, 
i2-head best, and Russian, 
average import 

Jute, good medium 

Wool, merino, average of Port 
Phillip, average fleece, andi 
Adelaide, average grease ] 

Wool, English, Lincoln, half 
hogs 

Silk, tsatlee j 

Hides, average of River Plate,! 
dry and River Plate, salted 

Leather, crop hides, 30-45 lbs.... 

Tallow, average of St. Peters-i 
burg, Y. C. and town 

Oil, palm 

Oil, olive 

Oil, linseed (49) 

Linseed (50) 

Average of 49 and 50 

Nitrate of soda 

Indigo, Bengal, good consuming 

Timber, average of hewn, aver- 
age import; and sawn or split, 
average import 

Average of vegetable food 

Average of animal food 

Average of coffee, tea and sugar 

Average minerals 

Average of textile materials 

Average of sundry materials 

Average of all articles 



Prices. 



i860. 1891. 



100 

100 



100 
100 

100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 

100 
100 
100 



100 
100 



100 
100 

100 
100 

100 
100 

ICO 

100 
100 
100 
100 
100 



100 
100 
100 
100 
100 
100 
100 
100 



92.6 

93.8 



56.3 
4S.4 

148.5 

126.7 

137.6 

33.8 

57-7 
45-8 
88.2 
86. 5 
.S3-7 
69s 
56.8 

92.7 
75-0 
65.0 



54-0 
81.3 



60.1 

4S.5 
56.5 

54-5 
75-4 

59-7 
56.5 
74.1 
72.4 
76.4 
74-4 
59-3 
73-1 



61.0 
76.6 

89-5 
72.0 

83.1 
68.0 

65-3 

75-4 



Percentage of 



Decline. 



7-4 
6.2 



43-7 
51-6 



Advance. 



66. 2 
42. 3 
54- 2 
11.8 

13-5 
46.3 
30.5 

43 2 

7-3 
25.0 

35-0 



46.0 
18.7 



399 

5I-S 
43-5 

45-5 
24.6 

40.3 
43-5 
25-9 
27.6 

23-6 
25.6 
40.7 
26.9 



39-0 
23-4 
10.5 
28.0 
16.9 
32.0 

34-7 
24.6 



48.5 
26.7 

37-6 



(Extracts from speeches delivered at the International 
Monetary Conference in November, 1892.) 

During the conference, Mr. Adolph Allard, delegate 
from Belgium, spoke as follows: 

" Unfortunately, Mr. de Rothschild is not troubled by 
the fall in prices. He is disposed to think 'that wheat at 
30 shillings a quarter, instead of 45 shillings, is rather a 
blessing than otherwise.' But I ask him what do the 
British farmers think of it? In Belgium, I can assert, 
agriculture is suffering from this deep evil; and as for 
England, I do not think that Mr, de Rothschild's views 
are shared by Mr. Chaplin, formerly Minister of Agri- 
culture, who has traversed the whole of England in the 
search for remedies to be applied to these evils. It appears, 
too, from the reports contained in tlie English papers a 
week ago, that Monsignor Walsh, the Archbishop of Dub- 
lin, is concerning himself with the monetary question, 
on account of the disasters which are befalling Ireland. 
Wiien giving evidence before an English commission on 
the subject of Irish evictions, he spoke in an absolutely 
bimetallic sense. He pointed out the evils which had 
been produced in England b}^ the scarcity and the appre- 
ciation of gold, and also the extremely difficult, embarrass- 
ing and disastrous position in which the Irish farmers 
were placed by the same cause." 

» * * * 

At the same conference, the delegate from Mexico 
spoke as follows : 

" The depreciation of silver, as it has appeared to 
foreign countries — for in our own country values have 
not perceptibly changed — has produced an actual pre- 
miutn on exportation. Articles which were not exported 
formerly are sold now in the markets of Europe and the 
United States at a loss of 8, 10, or 15 per cent, on the 
cost of their production and the expenses incurred, be- 
cause compensation is found in the gain in exchange of 
25 to 30 per cent, corresponding to the depreciation of 



silver, and for this reason the export of articles other than 
silver has risen from $6,000,000 in 1873 to $27,000,000 

in 1891." 

* * * * 

Mr. McCreary, member of the conference and delegate 
of the United States, spoke as follows: 

"The statement of Mr. de Rothschild that 'if the 
conference should break up without arriving at any- 
definite result, there would be a depreciation in the value 
of silver frightful to contemplate, and out of which a 
monetary panic might ensue,' is very significant, but this 
plan seems insufficient to meet the grave situation he 
presents, and inadequate as a remedy for decreasing 
prices and distressed agriculture. The complaints of 
English Chambers of Commerce, the recent statement of 
Archbishop Walsh, that ' the adoption of bimetallism or 
of some similar remedy, if there be a similar remedy, is, 
I am convinced, a matter of imperative necessity — that is, 
if the agricultural tenants of Ireland are not to be driven 
to inevitable ruin,' and the speech of Mr. Balfour, one of 
the ablest and most distinguished members of the British 
Parliament, in which, among other things, he said: 'I 
believe the bimetallic solution is possible and adequate. 
* * * I do say that the instrument of exchange which 
you actually have is a bad instrument, and I offer you for 
your acceptance an instrument which, if not perfect, is at 
all events practicable, and is incomparably better than any 
which you are likely to obtain by any other means of 
which I have any knowledge,' present the situation in 
Great Britain. It demands and will receive after awhile 
broader recognition and a better remedy than that sug- 
gested by Mr. de Rothschild." 

* * * * 

Sir William Houldsworth, delegate of Great Britain, 
spoke as follows: 

" Now, my honorable colleague, Mr. Bertram Currie, 
has told you that ' cheap goods, not dear goods,' have 



10 

always been held to be the conditions of profitable trade. 
How, then, does he account for the fact that during the 
last eighteen years an unprecedented fall in prices has 
taken place (not less than 30 per cent., as measured by 
seven independent sets of index numbers ), and yet there 
never was a time when, by the testimony of all engaged 
in agriculture, manufacturing and other trades, confirmed 
by the reports of two Royal Commissions in England and 
by investigations elsewhere, the profit earning power of 
every industry had more seriously and persistently de- 
clined, leading, as such a state of things must inevitably 
and ultimately lead, to irregularity of employment, serious 
reduction in the rate of wages in every department of 
industry, accompanied by strikes and lockouts and short 
time." 

Sir Guilford L. Molesworth, delegate of British India, 
spoke as follows : 

*' Our predecessors in the Paris Monetary Conference 
of 1878 and 1881 were almost unanimous in the opinion 
that silver must be rehabilitated. They only disagreed 
on the method of rehabihtation. Some were of opinion 
that matters would right themselves, whilst others consid- 
ered that the remedy could only come by re-establishing 
the link that had existed between gold md silver prior to 

1873. 

" The opinion of the latter was undoubtedly correct. 
Matters have gone on from bad to worse, and now we are 
confronted by the fact that Mr. de Rothschild, the most re- 
nowned financier of the world, tells us that ' if this confer- 
ence were to break up without arriving at any definite 
result there would be a depreciation in the value of silver 
out of which a monetary panic would ensue, tiie far- 
spreading effects of which it would be frightful to con- 
template.' 

" Now this state of things was clearly predicted by 
Ernest Seyd in 1871, when the severance of the fink be- 



11 

tween gold and silver was first contemplated. His pre- 
diction has been so remarkably fulfilled that I must quote 
his words : 

" 'It is a great mistake to suppose that the adoption of 
the gold valuation by other States besides England will be 
beneficial. It will only lead to the destruction of the 
monetary equilibrium hitherto existing and cause a fall 
in the value of silver, from which England's trade and the 
Indian silver valuation will suffer more than all other in- 
terests, grievous as the general decline of prosperity all 
over the world will be, 

" ' The strong doctrinarianism existing in England as 
regards the gold valuation is so bhnd that when the time 
of depression sets in there will be this special feature: the 
economical authorities of the country will refuse to listen 
to the cause here foreshadowed, every possible attempt 
will be made to prove that the decline of commerce is due 
to all sorts of causes and irreconcilable matters; the 
workman and his strikes will be the first convenient tar 
get, then speculation and overtrading will have their turn. 
Many other allegations will be made, totally irrelevant to 
the real issue, but satisfactory to the moralizing tendency 
of financial writers. The great danger of the time will 
be that, among all this confusion and strife, England's 
supremacy in commerce and manufactures may go back- 
ward to an extent which can not be redressed when the 
real cause becomes recognized and the natural remedy is, 
applied.' 

" In fulfilment of this prediction we find that the diffi- 
culties under which we labor have been attributed to all 
sorts of irreconcilable causes. It has been necessary to- 
invent a theory that progress in manufactures, in im- 
proved transport, inventions and banking have caused a 
species of economic revolution, which has created a new 
state in the conditions of trade and commerce differing 
from that which previously existed. But they overlook 
the fact that the alleged causes have been in active oper- 



12 

ation during the greater portion of the century (and when 
compared with the previous progress the}' were far more 
pronounced). It is obvious, therefore, that such a revo- 
lution, if it existed, should have arisen at an earlier 
period, and that it should have developed graduall}^ in- 
stead of setting in suddenly at the exact moment when 
the link was broken between gold and silver. Moreover, 
this theory involves another irreconcilable position. It 
is absurd to suppose that a revolution of this character 
could have affected gold prices so seriously, and yet 
should have left silver prices unaffected. Silver is the 
standard of value of more than half the world, yet silver 
prices have remained stable, whilst gold prices have fallen 
from 40 to 50 per cent." 

* * * * 

Mr. Van Den Berg, delegate from Holland, spoke as 
follows : 

" The loss incurred by the Treasury of British India 
on the sum which it has annually to pay to the home 
treasury already amounts to millions of rupees. This 
loss is one of the heaviest charges of the Indian Budget. 
It falls ultimately upon the taxpayers and indirectly 
makes them suffer. Nothing can be more natural, then, 
than that many voices should have already been raised in 
India in favor of the gold standard. The director of the 
Bombay Mint, Mr. Lewis E. Hynes, has published in the 
Bombay Gazette of the 17th and i8th of August, 1875, ^" 
article showing that the immediate adoption of gold as a 
standard of value has become an absolute and imperative 
necessit}'. 

" According to him, silver may remain in use as small 
change to supplement the gold, but the public must not be 
allowed to coin it freely ; so that the importation of that 
metal will cease, and gold alone will be used to liquidate 
the balance which is generally due from Europe to the 
East. 

" In this way it is possible that India, too, may be 



13 

found among the competitors, struggling for their share 
in the production of gold, and, in that case, the monetary 
question will enter upon a stage far graver than any pre- 
vious ones. The theory of the insufficiency of gold, 
which you have successfully attacked by confining your- 
self to the needs of the people of Europe, will assume an 
entirely different aspect when we have to deal with an 
additional annual demand of 100,000,000 francs, perhaps, 
for the needs of the East. A general appreciation of 
gold will be the necessary consequence. The prices of 
all commodities which are exchanged for gold will fall." 
* * * * 

Dr. Andrews, President of Brown University of Rhod^ 
Island, and delegate of the United States, spoke as fol- 
lows: 

" Gentlemen, as I suggested, a second powerful con- 
sideration urges the thoughtful people of the United States 
to try and rehabilitate silver as money of full debt-paying 
power. It is this: They wish to stay that banetul, 
blighting, deadly fall of prices which for nearly thirty 
years has infected with miasma the economic life-blood of 
the whole world. They do not desire to debase the 
standard of value. They would have every debt paid in 
gold or its equivalent, but they do not wish gold to 
be arbitrarily and unjustly appreciated. 

" Many writers of great intelligence fall into a curious 
confusion of cause and effect upon this point, identifying 
fall of general prices with intrinsic cheapening of com- 
modities. For instance, the Berlin Nation had, some 
years since, an editorial on ' The Decline in Prices an Ad- 
vance in Civilization,' wherein such decline was set forth, 
not as asign of economic advance, which, under the world's 
present economic system, it often is, but as itself an element 
in such advance, which it is not. That many manufact- 
ured articles have long been decreasing in intrinsic cost is 
a great blessing, and articles of this class would doubtless 
have gone down more or less under an ideal system of 



y 



14 

money. But it was not necessary that general prices 
should fall, and this fall, I maintain, has been an absolute 
and unmitigated curse to human civilization. Mark, it is 
not low prices which we condemn. Low prices, once 
established, are as good as high. That is to say, the 
words 'high' and ' low ' in respect to prices are not abso- 
lute but relative terms. The everlasting fall of prices, the 
act of sinking, is the accursed thing. None profit from it 
but such as are annuitants, and nothing else, and we may 
be sure that no civilized state is going to legislate to keep 
prices falling, when the fall is once seen, as it must soon 
be seen, to injure all but the very few unproductive peo- 
ple, who live upon their incomes." 

* * ♦ * 

Mr. Boissevain, delegate of the Netherlands, spoke as 
follows : 

" But how is the existence of plenty to be established, 
if not by an increase of prosperity? Now, I do not see that 
we have cause for rejoicing in any increase of general 
prosperity which has been exhibited in recent years. On 
the contrary, I think that almost everywhere and almost 
continuously, in spite of certain periods of reaction, we 
have had a period of depression for trade and industry. 
No one would be so bold as to say, no one would be able 
to prove, that we have passed through a period of pros- 
perity, and yet prosperity ought to have been the result of 
plentiful supplies of products. I am not by any means 
alone in thinking that the real situation in recent times, 
the situation with which we are all acquainted, proves 
that the fall in prices is not the result of plenty. It is not 
the abundance of products which has made the scale sink 
on one side; it is the scarcity of coin, of money, which 
has made it rise on the other. 

" I will not deal with this point at length, for all the 
arguments are known to you. This scarcit}'^ of money, 
this scarcity of gold, which has become the sole standard 
in all the countries of Europe and America, has neces- 



15 

sarily had an unfavorable influence upon commerce and 
industry. 

"Mr. Weber told us also that the fall in the price of 
the white metal was wrongly attributed to its demonetiza- 
tion, instead of to the increased production. In my opin- 
ion the chief cause of the lall in the gold price of silver 
has been the enormous decrease in the monetary use of 
silver during the last twent}'^ years, in consequence of the 
legislative measures which date from the new monetary 
law enacted in Germany. 

"What is the state of things that we see at present? 
We see that in those countries which have a gold stand- 
ard prices have fallen enormously; and that, on the con- 
trary, in the countries which have a silver standard, in 
spite of the unfavorable treatment of silver in Europe, 
and in spite of the diminution in its uses, the relation of 
value between money and goods has remained almost 
exactly what it was twenty years ago. They try to 
frighten us by pointing to the dangers which ensue from 
the abundance of silver, and yet I repeat that in spite of 
the unfavorable position in which silver is placed we fail 
to observe in silver standard countries any of the evil re- 
sults which ought to follow from ihat abundance." 
* * * * 

Further remarks of Mr. Allard, delegate of Belgium: 

" The mass of precious metals, that is to sa}' of gold and 
silver, in the world forms it seems a sort of common pos- 
session of the various nations. They pass from one na- 
tion to another; they exchange wealth and facilitate its 
just distribution, and they regulate general prices. 

" Between 1848 and i85ithe production of these metals 
increased in a degree unprecedented in history. In a few 
years the gold from California and Australia had doubled 
the amount of gold and silver money actually circulating 
in the world. 

" In spite of the efforts of a school which was at that 
time new, gold was not demonetized. Up to that time 



16 

the business world had not suspected that there was such 
a thing as a monetary question. We therefore refused to 
try so bold and dangerous an experiment. » 

" Under the influence of abundant money and the rise 
of prices there was such a rapid growth of progress, of 
commercial intercourse, of enterprise, and of production 
that the amount of gold soon became insufficient for the 
continually increasing demands upon it. The Bank of 
England was so much in need of the metal in i860 that it 
was compelled to borrow 52,000,000 francs in gold from 
the Bank of France. It was for civilization an era of 
business, of prosperity, of work, and of abundance, which 
lasted till 1873. 

" In 1873 silver was demonetized in Europe in accord- 
ance with the theories which had not prevailed in 1851. 

" Silver had not fallen in value, and had given rise to 
no anxiety; and yet it was deprived of the right of being 
used as money, and was forbidden to enter Europe. It 
is confidently stated that this action was a serious blow to 
freedom of trade. 

" In 1870, that is to say three years before this prohi- 
bition, it had been foretold that such a step would be in- 
evitably followed by a revolution in prices, by a general 
fall in values and by a serious crisis. 

" This crisis, which was foretold in 1870, is now, it is 
said, in action. The disturbances which it produces are 
the more unjust and the more profound since the fall in 
prices is not produced by the development of labor or by 
the abundance of wealth, but by an artificial cause, which 
is none other than the law proscribing silver and thereby 
producing appreciation of gold. 

"No variation in the level of prices can be observed in 
silver countries. It follows therefore that the deprecia- 
tion of silver in Europe is only produced by the apprecia- 
tion of gold. 

"It is said that this artificial fall in prices caused by 
the appreciation of gold has for its results terrible social 



17 

inequalities, the ruin of our agriculture, the slackness of 
our industries, the distress of our workmen, and the un- 
easiness which prevails everywhere. 

" For twenty years there has been a continual endeavor 
on all sides to find some other cause, but none has been 
discovered; and therefore no more effectual remedy has 
been found than the monetary remedy. 

'•• It appears to me that the task to which this confer- 
ence of 1892 is specially called is to counteract the evil 
of the fall of prices and the artificial appreciation of gold, 
and to combat the instability of exchange between the 
gold countries, w^hich constitute one-third of the world, 
and the silver countries, which form the other two-thirds." 
* * , * * 

Sir Guilford Molesworth, delegate of British India 
spoke again, as follows: 

" But in England we have something worse to fear than 
the crisis which Mr. de Rothschild predicts. It is impos- 
sible to close our eyes to the dangers which have been 
disclosed by the honorable delegate for Great Britain, 
Sir William Houldsworth. He will tell you that the in- 
dustries of Lancashire have been simply ruined by the 
condition of our currency system, and that both employers 
and employed are clamoring for currency reform. In 
whatever direction we turn our eyes we find similar con- 
ditions of depression and distress, whether we turn to 
iron, steel, silk, woolen, or agricultural industries. A 
very large number of Chambers of Commerce in the 
United Kingdom have petitioned government for currency 
reform; and it was onW last week that a large and influ- 
ential meeting of the representatives of agricultural indus- 
try passed a resolution requesting the government to 
endeavor to secure, by an international agreement with 
the leading nations, the unrestricted coinage both of silver 
and gold. Next we find that Archbishop Walsh (the 
leader of political opinion in Ireland) declares that the 
adoption of bimetallism is a matter of imperative necessity 



18 

if the agricultural tenants of Ireland are not to be driven 
to inevitable ruin. And lastly we hav^ India crying out 
that the development of her resources is hindered and her 
trade paral3^zed by the difficulties into which the state of 
the currency has plunged her." 

* * * * 

Mr. Van. Den Berg, delegate of the Netherlands, spoke 
again, as follows: 

*' The sufficiency or the insufficiency of gold for the 
monetary uses of the world is, gentlemen, the real knot 
of the question before us. It is not unfamiliar that up till 
now the defenders of monometallism have always sup- 
ported the idea that there was no lack of gold, and that a 
more or less considerable appreciation of the yellow 
metal was entirely out of the question. The bimetallists 
alone were of the contrary opinion, but now one of the 
most fervent partisans of monometallism has joined their 
ranks, and tells us that it is not silver which has fallen, 
but gold which has risen. The partisan which I have in 
mind is the Statist, of London, which is an authority in 
monetary and financial matters, and rightly so, because, 
unless I am mistaken, it is written at the dictation, or at 
least the inspiration, of the learned statistician, Robert 
Giffen. In the number of November 5, we read the fol- 
lowing declaration apropos of the proposals submitted to 
the British government in regard to the possible introduc- 
tion of the gold standard in British India. 

"We presume that the plan is based upon llie mistaken 
notion that the value of gold is more stable than that of 
silver. We have seen that between 1873 and 1880 all 
gold prices fell ruinously. We have also seen that during 
the same period silver prices did not fall; in other words, 
while the smaller quantity of gold year after year ex- 
changed for a larger quantity of all other commodities, 
silver included, the same quantity of silver, or nearly the 
same, exchanged for the same quantity of all other com- 
modities, gold excluded. Does it not necessarily follow 



19 

that it was the conditions which determined the value of 
gold, which altered, not the condition which determined 
the value of silver; or to put the matter into perhaps 
plainer language, does it not necessarily follow that the 
value of silver during the past twenty years has been far 
more stable than the value of gold? 

" Gentlemen, has the weakness of gold monometallism 
ever been placed in clearer light than in the lines which I 
have cited, written by one of the most convinced mono- 

metallists?" 

* * * * 

Senator J. P. Jones, delegate from the United States, 
spoke as follows: 

" Dr. Soetbeer's tables of prices, which include 114 
leading commodities, taking the figures of 1849 as ^ basis, 
and estimating them at 100, show that by 1853 prices had 
risen to the ratio of 113, in 1863 to 125, and in 1873 
to 138. 

"It is a significant coincidence that beginning with 
1873, the year in which, by the demonetization of silver, 
the volume of the world's money was reduced, the trend 
of prices of commodities in general was reversed, and a 
fall set in. Continuing his figures to 1885, Dr. Soetbeer 
gives the number for that year as 108 — a decline of 30 
percent, in twelve years, or an average of 2^ per cent, 
per annum. 

" Mr. Sauerbeck's investigations, made independently, 
take as a datum line the prices ruling from 1867 to 1877 ^"d 
show that by September, 1887, the general range of 
prices had fallen to 68.7 — the lowest within the century. 

" Statistics show that the fall of prices in gold-standard 
countries has continued up to the present time and is still 
in process of operation, the London Economist stating the 
fall for the past two years at 4.8 per cent., or about 2yi 
per cent, per annum. 

'' Under the baneful influence of falling prices, agri- 
culture ceases to be profitable. In the case of leased 



20 

farms, the rent, which was just and equitable when fixed, 
becomes, with the progress of time, unjust and inequi- 
table, the payment requiring from year to year a constantly 
increasing proportion of the product, till nothing is left 
for the tenant but the hardest and barest existence. In 
cases in which the farms are owned by those who work 
them, the ownership in nine cases out of ten is encumbered 
by a mortgage. Very few working farmers own their 
own farms free. The mortgage that, at the beginning, 
was equivalent to but one-half the value of the farm, 
soon, owing to the fall of prices of the product and conse- 
quent reduction of value of the property, becomes worth 
three-fourths and ultimately, in many cases, upon the 
maturity of the mortgage, the farmer finds himself com- 
pelled to yield up his entire farm to the mortgagee in 
satisfaction of the incumbrance. Thus, by reason of the 
fall of prices, owing to an increase in the value of the 
money unit, agriculturists are reduced from comparative 
comfort to absolute penury. The effect upon the artisan 
class is no less injurious. 

" When, at tlie beginning of this century, the South 
American colonies began their prolonged struggle for in- 
dependence a material reduction took place in the sup- 
plies of the metal with which Europe had been enriched, 
and again the effects of monetary shrinkage began to 
make themselves felt in a fall of prices and a shriveling 
of industry. Professor Jevons demonstrated that between 
1809 and 1B49 the purchasing power of money increased 
fully 145 per cent., which is but another mode of stating 
that the general level of the prices of commodities fell 60 
per cent., or at the rate of i^ per cent, per annum. 

" As was to be expected, all industry was deranged and 
distress was universal. As a consequence the masses of 
the people in all countries became engaged in riot and in- 
surrection. In Great Britain mass meetings were held 
which sent to Parliament monster petitions for bread. On 
the continent of Europe open revolt taxed the energies of 



21 

the troops, and as a result of a display of military force 
large numbers of the people took refuge in secret political 
organizations which under cover of darkness plotted the 
overthrow of social order. 

" So subtle was the cause of the difficulty that its 
origin eluded detection. The distress of the working 
classes was attributed to all causes except the real cause. 
By some it was ascribed to the greed and cupidity of the 
employing classes. By others — among them for the most 
part the economical writers of the time — to overproduction 
of commodities. The working men adopting these ex- 
planations inveighed violently against labor-saving ma- 
chinery and against employers as a class. They could 
observe the hesitancy of capital to invest in productive 
enterprises — an investment that would mitigate the evil 
by giving employment to labor — but they failed to per- 
ceive that during a period of falling prices capitalists are 
compelled, in self-protection, to avoid industrial under- 
takings. It did not occur to the workers, nor to those who 
undertook to inform and instruct them in political economy, 
that at such time the basis upon which the operations of 
industry are conducted is not a level platform but an in- 
clined plane — the production of the articles being effected 
at the cost, or price, corresponding with the higher end 
of the platform, while sales are effected at figures cor- 
responding with that of the lower end. Employers 
were, therefore, carrying on business with little or no 
profit, and it was hardly to be expected that capital would 
seek investment in a direction in which the risk was not 
warranted by the reward." 

* * * * 

Senator Jones said again: 

" Yet under present conditions the prices of all com- 
modities are falling, and industrial conditions are yearly 
becoming less and less satisfactory. 

" If the present ruinous process of falling prices is to 
be arrested, a larger supply of money must be provided 
with which to do business." 



22 

Senator Jones said again : 

<* Before the question of remonetization of silver arose, 
some of the ablest advocates of the gold standard were 
frank to admit and deplore the evils which they prophesied 
would result from a rise of gold owing to the failure of its 
supply to keep pace with demand. Thus the London 
E conomist , in 1869, in its review of financial conditions, 
said : 

" ' It may be safely affirmed that the present annual 
supply of 30,000,000 pounds sterling of gold is no more 
han sufficient to meet the requirements of the expanding 
commerce of the world, and prevent that pressure of 
transactions and commodities on the precious metals 
which means m practice, f rices and wages constantly 
tending toward decline. 

" ' The real danger is that the present suppHes should 
fall off, and among the greatest and most salutary events 
that could now occur would be the discovery of rich gold 
deposits in three or four remote and neglected regions of 
the earth.' 

"Not only have ' no rich gold deposits' been discov 
ered since that time, but the production of the deposits 
then known has declined. The yield of $150,000,- 
000, which in 1869 was considered barely sufficient 
to meet the demand, has fallen to $130,000,000 in 
1892, while during the same period the needs for money 
have enormously increased. This increasing demand, 
pressing upon the falling supply, was of itself a sufficient 
misfortune, but the subsequent demonetization of silver 
struck a blow at all industry and commerce from which 
they have ever since been staggering." 

Senator Jones quotes from speech of the late Earl of 
Beaconsfield, delivered in 1879, ^^ follows: 

" Gold is ev^ery day appreciating in value, and as it ap- 
preciates in value, the lower become prices." 



23 

Senator Jones said further: 

" According to the painstaking computations of Mr. 
Sauerbeck, production increased in England between 1850 
and 1870 by 2^ per cent, per annum, while between 1870 
and 1885 it increased by only i 1-6 per cent, per annum. 
Yet the general level of prices rose during the first period 
15 to 20 per cent., while it fell during the second and 
shorter period no less than 30 per cent." 
* * * • 

Senator Jones said further: 

"And now, Mr. President and gentlemen, I trust I shall 
not transcend the proprieties of the occasion if I take the 
liberty of inviting the special attention of the honorable 
delegates from Great Britain to what I am about to say. 

" According to statements which have received wide- 
spread publication and which I have not seen contradicted, 
the fall of prices in England has been on such a scale 
that farms are going out of cultivation, and the landed in- 
terest is passing into the hands of mortgage companies. 
These circumstances serve to remind us of the statements 
made by an eminent historian of Great Britain, Sir Arch- 
ibald Alison, to the effect that on the occasion of a former 
severe contraction of the money volume, on the passage by 
Parliament of the bill compelling payments in gold, prices 
rapidlv fell — cotton sinking in the course of three months 
to one-half its former level. Within six months all prices 
had fallen one-half, and for three years showed no indi- 
cations of improvement. By reason of this contraction of 
the currency the industry of that great nation was con- 
gealed as is a flowing stream by the severity of an Arctic 
winter. 

" Bankruptcies increased in 1819 more than 50 per cent, 
over the number for the previous year. The owners of 
land, who in 1819 numbered 160,000, were, as the histo- 
rian veritably informs us, reduced in seven years to the 
number of 30,000, and one person in every seven of the 
population was obliged to be supported by organized 



24 

charity. The disorganization of industry and the conse- 
quent compulsory idleness of workmen led to frequent 
conflicts between the people and the military. They also 
led to serious commercial crises." 

* * * * 

Senator Jones spoke again, as follows: 

"By the evidence given before more than one Royal 
Commission, we are assured that the rupee will to-day in 
India purchase as much as it ever did in its history. 
What is the significance of this statement? It clearly 
implies that the farmer of the Punjab is now receiving 
more rupees for the 30 shillings which his wheat realizes 
in London than ten years since he obtained for 40 shil- 
lings. How is it possible that Europe and America can 
market their crops under such conditions of competition? 
Should the rupee fall in gold value in Great Britain to a 
shilling, while maintaining its full purchasing power in 
India, the agriculturists of England will see wheat selling 
in London at 20 shillings a quarter. 

" While the so-called ' fall ' of silver is stimulating the 
exports of India at the expense of the farmers of England 
and of the United States, it is at the same time building 
up in India a destructive and merciless competition in 
cotton goods to Chma at the expense of the people of 
Lancashire. 

" To show the extent of the stimulus supplied to the 
Indian industries and the effect which the present policy 
of Great Britain is exercising upon the industries of Lan- 
cashire, I read the following brief but suggestive extract 
from a speech delivered by Mr. John A. Beith at a meet- 
ing in the town hall of Manchester, last October. Mr. 
Beith on this subject says : 

" ' In 1874 the total exports of yarn from Indian mills 
to China and Japan amounted to only 1,000,000 pounds. 
It was only in 1875, ^^^ when silver had fallen 3 pence 
per ounce, that the 1,000,000 pounds of exports, which it 
had taken Indian mills nearly ten years to get up to, at 



25 

once expanded, as if in obedience to the wave of an 
enchanter's wand, into 5,000,000 pounds. In 1880 there 
was a further fall of 5 pence per ounce, and, conse- 
quently, a further advantage to the silver of India and 
China, as compared with England accepting only gold 
payments, and so, then, the five millions of exports from 
India became 25 millions. In 1885 another fall took 
place, and the 25 millions became 75 millions. In 1889 
there was a further fall of 5 pence in silver, and the 75 
millions became 127 millions. In 1891 there was slill a 
further fall, and the 1.27 millions of exports of yarn from 
India to China became 165 millions, so that in seventeen 
years, through the operation of this cause chiefl}', 1,000,- 
000 pounds of yarn exports per annum had risen to 165,- 
000,000 pounds per annum. These are very large figures, 
but if you look a little more into the details they become 
even more appalling. 

" 'One hundred and sixty-hve million pounds of yarn 
sent from Bombay to China and Japan means that India 
is sending six times as much as the United Kingdom 
sends to China and Japan, twice as much as the United 
Kingdom sends to India, China and Japan together, and 
is indeed very fast approaching the figure of Lancashire's 
total exports of yarn to tiie whole world. If the ratio of 
increase continues as hitherto, the shipments from India 
will exceed in from three to four years the total shipments 
of yarn from the United Kingdom to the whole world, in- 
cluding India, China and Japan. It seems to me that 
those figures speak eloquently for themselves.' 
* * * » 

Further on, Senator Jones spoke as follows : 
" While, owing to the ruinous rise of gold, we have been 
unable to prevent a serious and continued fall in the prices 
of such commodities as are internationally dealt in, we have 
been able, by the aid of silver money, to sustain at a level 
more nearly consistent with justice the prices of com- 
modities that form the subject of our domestic business. 



26 



013 514 478 2 



The products that have not had an export have maintained 
their position better and fallen less than those of inter- 
national trade, such as wheat and cotton." 

* * * » 

Mr. Allard, delegate from Belgium, spoke again, as fol- 
lows: 

" The statistics of Mr. Sauerbeck have clearly proved 
that the allegation of overproduction as a cause of falling 
prices is absolutely false. From i860 to 1873 the total 
production of the world increased each year 2.8 per cent. 
That was the age of California and bimetallism. Prices 
increased 40 per cent. 

"From 1873 to 1885 the production of the world in- 
creased yearlv only 1.6 per cent.; a decrease of nearly 
one-half. Prices should have increased ; but on the con- 
trai}^ they fell 32 per cent. 

"The truth, gentlemen, was told by Mr. Goschen, in 
England, 1883: ' The fall of prices comes from the rise 
of gold.' He expressed his thought in these typical 
phrases: 'Fortunate are they who own sovereigns, and 
unfortunate they who own commodities, products, and 

other goods.' " 

* * * * 

Mr. de Osma, delegate of Spain, spoke as follows: 
" Whatever personal sympathies we may feel, we must 
admit, gentlemen, that very few of us have been able to 
agree with the stoic opinion which denies the existence of 
a crisis and concludes very logically that there is no need 
of looking lor a remedy. That opinion is too strongly 
contrasted with the atti'.ude of some of our colleagues 
who are moreover themselves thoroughly convinced and 
perfectly impenitent monometallists. It disappears before 
the reiterated and recent declarations of statesmen, who 
have described the evils which are ruining the agriculture 
and destroying the industries of their countries with a 
precision whose significance it is impossible to mistake." 



/Vv ^trices 



[/(JeuJ Orlefi^^is^M.^.) 



LIBRARY OF CONGRESS 



013 514 478 2 ^| 



